10th Jul 2023 10:49
(Alliance News) - Analysts on Monday questioned why BT Group PLC's Chief Executive Philip Jansen is resigning after a "mere" four years.
"To resign a mere four years into running one of Britain's best-known companies would suggest Jansen has had enough of the challenges that come with BT," AJ Bell's investment manager Russ Mould said.
BT, the London-based telecommunications company, said on Monday that its nominations committee of the board has started the formal succession process in preparation for CEO Jansen's departure.
Jansen said he will step down from his role, at the appropriate moment, over the next twelve months.
The announcement confirmed a Sky News report on Saturday, that said Jansen had been considering multiple offers for positions in the US.
Jansen had joined BT from Worldpay Inc, where he had served as co-CEO since 2013.
Since joining BT, Jansen has re-shaped the company by announcing a reduction in the workforce by 55,000 employees by the end of the decade, and investing in high-speed broadband; setting a target of connecting 25 million homes by the end of 2026.
"Jansen had a massive list of problems to fix the second he walked in the door as the new boss of BT in February 2019," said Russ Mould, investment director at AJ Bell.
"His decisions were logical: cut more of the fat from the business, sharpen the focus on providing faster broadband to households across the country and find alternatives for non-core operations such as putting the sports broadcasting arm into a joint venture.
"Sadly, Jansen is not going to be remembered for being the person who breathed life back into BT. It's still the slow, creaking juggernaut today that it was before he joined. Earnings are forecast to go into reverse this financial year and show minimal progress over the following two years."
Victoria Scholar, head of investment at interactive investor said: "Shares have fallen significantly under Jansen's tenure."
"A fresh CEO could be another element of its overhaul, alongside job cuts, technological changes, and its fibre roll out. However, shares are failing to react today amid the uncertainty around his successor."
Shares in BT Group were down 0.2% at 122.00 pence in London on Monday morning. Over the last 12 months, the stock is down 37%, and over the last five years, it has shed 45%.
"Shareholders have suffered big time: more than GBP10 billion has been wiped off the value of the business under Jansen’s leadership, and BT is now nearly one-quarter owned by a French billionaire who has taken advantage of the weak share price to build a strategic stake," Mould said.
In May, telecom tycoon Patrick Drahi's Altice said that it has bought a further 650.0 million shares in the telecommunications company, increasing its ownership to 2.44 billion shares. This represents about a 24.5% stake in BT.
BT is now working with the London-based search firm Spencer Stuart to identify a successor to Jansen, who took on the role of chief executive in 2019.
BT Chair Adam Crozier said: "The success process to replace Philip is something that the board was well prepared for. All appropriate candidates are being considered, and we expect to be able to update the market on progress over the course of the summer."
An announcement about the succession process could be made within weeks, with BT's annual general meeting next week.
"We're investing heavily in both BT's and the UK's future. We're building like fury," said Chief Executive Philip Jansen.
"This is creating a much stronger BT group which is starting to drive growth for both investors and the UK. But there's a lot more to do and I am fully committed to driving the business forward until I hand over to my successor."
By Sophie Rose, Alliance News reporter
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